TSMC to invest in ASML

LONDON – Leading Taiwan Semiconductor Manufacturing Co. Ltd. (Hsinchu, Taiwan) has opted to take a 5 percent stake in lithography equipment maker ASML Holding NV (Veldhoven, The Netherlands) as part of an equity-plus-research funding program. Intel has already opted to take a 15 percent stake in ASML.

TSMC is paying 838 million euro (about $1.04 billion) to acquire its stake in ASML and has committed to contribute 276 million euro (about $340 million), spread over 5 years, to ASML's research and development programs.

TSMC's move follows a similar one by Intel that saw the world's largest chip company agree to acquire a 15 percent stake in ASML as part of a plan to accelerate the development of extreme ultraviolet (EUV) lithography and the transition to manufacturing on 450-mm diameter wafers.

ASML put together the equity-plus-research funding program and pledged to make up to 25 percent of the company available to R&D investment partners. ASML went to Intel, Samsung and TSMC first. With TSMC opting to take a 5 percent stake it leaves 5 percent for Samsung or others to take up.

"One of the biggest challenges facing IC scaling today is how to effectively control the escalating wafer manufacturing cost," said Shang-yi Chiang, TSMC's co-COO, in a statement. "We are confident that the additional funding for ASML's research and development programs will help secure and accelerate EUV development activities, in parallel with the necessary focus on improved performance of existing optical lithography tools and speed up the deployment of new technologies for 450-millimeter wafers. This effort will help the industry control wafer cost, and therefore protect the economic viability of Moore’s Law."

"These technologies will benefit the entire industry and are not restricted to our co-investment partners," said Eric Meurice, CEO of ASML, in the same statement.

Of course they would. This deal was stuck at a much lower share price. Since the Intel announcement ASML share price has increased by over 40%. This is like free options and a nice way to add book value to your own equity.

@resistion- ASML said up front it would offer up to 25 percent total (and the company capped Intel's stake at 15 percent). Barring a change of plan, that leaves only 5 percent for Samsung. And I personally don't think Samsung would want 20 percent. It remains to be see if Samsung even wants to buy 5 percent.